NTPC raises Rs 3,000 crore through bonds

13 Apr 2023 , 10:22 AM

NTPC, the state power utility, successfully raised Rs 3,000 crore through bond sales that carry an interest rate of 7.35%. This is a lower rate than what NTPC may have offered if the broader yields had not decreased after the central bank’s unexpected policy ‘pause’ last week.

According to market sources, investors are eagerly purchasing NTPC’s bonds due to the limited availability of three-year bonds from the company, which has a robust credit profile. The slight premium over sovereign bonds indicates this investor enthusiasm.

NTPC’s bonds hold the highest possible rating of AAA from India Ratings, ICRA, and Crisil. This bond sale is NTPC’s first for the current fiscal year and the funds generated are expected to be utilized for capital expenditures as well as loan refinancing purposes.

Bond traders reported that on Wednesday, the three-year residual maturity government bond that saw the most trading activity concluded with a settlement rate of 7.02% in the secondary market. Meanwhile, the government has plans to issue a new three-year bond on Thursday, with bond traders predicting a coupon rate of around 7.01-7.03%.

At around 10.23 AM, NTPC was trading 0.65% lower at Rs 174.65, against the previous close of Rs 175.80 on NSE.

For feedback and suggestions, write to us at [e-mail]